Iran's Parliament Speaker Mohammad Bagher Ghalibaf on Monday reaffirmed that Tehran will administer the Strait of Hormuz in accordance with international law, as the U.S. Treasury issues a 60-day license to export Iranian oil. The Iranian Parliament Speaker stated that the administration of the Strait of Hormuz will “never” go back to the pre-war status quo, according to a report by the Iranian news agency IRNA. “Iran will administer the Strait of Hormuz,” Ghalibaf said.

According to the Memorandum of Understanding (MoU) signed by Washington and Tehran, the administration of the Strait of Hormuz would be at the discretion of Iran and Oman. At the same time, ships would be allowed to pass through the waterway free of charge for 60 days.

US Issues 60-Day General License

Treasury Secretary Scott Bessent announced on Monday that the U.S. had issued “a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil.” Bessent stated that the decision followed “productive talks in Switzerland,” where Iran committed to “free and open transit in the Strait of Hormuz.” He also echoed Vice President JD Vance’s comments regarding Iran permitting inspectors from the International Atomic Energy Agency (IAEA) into their country.

Iran Denies New IAEA Deal

However, Iran’s Foreign Ministry spokesperson Esmaeil Baqaei reacted to Vance’s comments in a report by IRNA. Baqaei said that “Iran’s interactions with the Agency, in accordance with Iran’s obligations under the Safeguards Agreements, will continue according to existing procedures.” He added that interactions would continue in compliance with regulations decided upon by Iran’s Parliament and the Supreme National Security Council.

The report cited unnamed sources familiar with the matter, stating there were no discussions on the nuclear issue during the 18-hour negotiations and that Iran had not agreed to new commitments.

IAEA Access Status

Notably, Iran had suspended IAEA access to its sites that were bombed by Israel and the U.S. during last year’s 12-day war (June 13 to June 24). The agency pulled out its inspectors from the country in July last year. The country’s parliament had passed a law last year to suspend cooperation with the agency until the safety of its nuclear facilities could be guaranteed.

President Donald Trump and Iranian President Masoud Pezeshkian signed an interim ceasefire agreement, committing both nations to reach a final peace deal within 60 days. The Memorandum of Understanding (MOU), now referred to as the Islamabad MOU, outlines a structured framework that includes nuclear obligations, a $300B economic reconstruction program, and the resumption of shipping through the Strait of Hormuz. In the latest development, Iran's top negotiator confirmed that both sides have agreed to establish a communication line regarding ship passage in the Strait of Hormuz to avoid conflict, according to Reuters citing Iranian State TV. This agreement aims to further stabilize maritime operations in the region.

Nuclear Commitments

Iran has reaffirmed that it will not produce or acquire nuclear weapons and is committed to maintaining its current nuclear status quo until a final agreement is concluded. The US and Iran have agreed to resolve the status of Iran's stockpiled enriched material through a mutually agreed mechanism under International Atomic Energy Agency (IAEA) supervision. The MOU also includes a non-interference clause, with both countries committing not to interfere in each other's internal affairs.

Economic Relief and Reconstruction

The MOU confirms that $300B has been allocated to be invested in Iran, part of which will be spent on reconstruction. The US and regional partners have committed to this economic reconstruction program, though the implementation mechanism will be finalized as part of the final agreement. Until a final deal is reached, the US commits to issuing waivers for Iranian oil, petrochemical, and derivative exports immediately after signing, with these waivers remaining in effect until sanctions are fully lifted. The US also commits to granting Iran access to frozen funds within the MOU implementation, with a specific release mechanism to be agreed upon during negotiations.

Maritime Security and Hormuz Passage

Iran's Persian Gulf Strait Authority has announced that vessels must submit transit requests 48 hours in advance to pass through the Strait of Hormuz, with permits to be issued as fast as possible. Iran's Supreme National Security Council has confirmed that mine clearance will be carried out under the Islamabad MOU, with technical passage details to be announced by the Persian Gulf Strait Authority. Iran will ensure safe passage of commercial ships between the Gulf and Gulf of Oman, with commercial ship transit set to begin immediately and be fully established within 30 days, pending mine clearance and resolution of technical obstacles. Iran is also ceasing efforts to cut off traffic in the Strait of Hormuz in advance of the formal signing. Despite these commitments, US intelligence agencies have assessed that Iran retains the capability to shut down the Strait of Hormuz at will.

Market Reaction

Following the signing, prediction market platform Polymarket indicates a 55% probability that shipping through the Strait of Hormuz will return to normal by July 31, 2027, with over $6.1 million bet on this contract. In energy markets, WTI crude oil fell 2.89% to $74.57 per barrel, while Brent crude declined 2.25% to $77.76 per barrel.

Summary of MOU Terms

The key terms of the Islamabad MOU are outlined below: